Gambling Commission to review commercial restrictions on British betting accounts
The regulator wants to learn how restrictions affect customer behaviour.
UK.- The Gambling Commission has announced that it will undertake a review of licensed gambling operators’ application of commercial restrictions on betting accounts. CEO Andrew Rhodes said the regulator didn’t plan to intervene in the issue of commercial liabilities but wanted more insights into how restrictions are applied in order to ensure fairness and transparency for customers.
Rhodes noted that the practice of bookmakers placing commercial restrictions on customers has been a source of contention between consumers and gambling operators. He revealed that the commission had sent a data request to some of the largest online real-event betting providers earlier this year to collect data on restrictions applied to active customer accounts within the previous calendar year.
This request covered a majority of the market – almost 15 million customer accounts. From a total of 14,923,840 active customer accounts, operators reported 643,779 accounts restricted in some form – a rate of 4.31 per cent. This includes all forms of restrictions, and some accounts will be subject to multiple forms of restriction. The proportion of restricted accounts can vary significantly between operators due to individual risk appetite, operator size and profile of customer base.
The data shows that in most cases a maximum stake factor reduction is imposed – restricting the maximum stake to a percentage amount of what is available to an unrestricted customer. Of the active accounts, 2.68 per cent were subject to a stake factor restriction. Of restricted accounts, 62.17 per cent were subject to a stake factor restriction. The data shows some operators use stake factor restrictions as their sole form of restriction.
The second most common form of restriction was account closures, with 2.23 per cent of active accounts being closed for commercial reasons. This applies to 51.69 percent of restricted accounts. Given the overlap in the figures, a large proportion of accounts will be subject to stake factoring prior to being permanently closed. Several operators report not using account closures for commercial reasons at all.
Operators may also withdraw betting facilities without explicitly closing their account, including by applying a stake factor restriction of 0.00, essentially preventing a customer from placing bets. This type of restriction was placed on 0.83 per cent of active accounts, applying to 19.15 per cent of restricted accounts.
Operators may also market restrict a customer, preventing them from betting on certain markets but not across the entire sportsbook,– for example a customer only prevented from betting on horseracing. This was found not to be widespread across surveyed operators, with many reporting they do not apply such specific restrictions at all.
As part of the data request, operators were also asked for data on the difference in profit and loss (for the customer) for commercially restricted accounts. From this data, it was found that 25.42 per cent of active customers are in profit vs. 46.78 per cent of restricted customers.
Rhodes said the data had provided valuable insights on the nature and prevalence of commercial restrictions but that it was not possible to get a full picture of how and why individual operators apply restrictions. The regulator will therefore be engaging further with the industry and others.
He said: “We do need to understand the role that commercial restrictions may be playing in pushing customers to illegal gambling operators and driving customer behaviours such as ‘multi-accounting’ which undermine wider controls designed to prevent crime, protect consumers and identify integrity threats. Whilst managing their commercial liabilities is important, the licensed industry will share our concern about these risks and want to avoid these outcomes.
“As noted in the White Paper, licensed operators should be transparent with customers, both at the start of the relationship and throughout, about how, when and why an account might be restricted, and ensure customers are aware of any restrictions prior to depositing funds or placing a bet. We are therefore exploring the scope for improvements in the communication and transparency from operators to consumers about how, when and why an account might be restricted. Whilst we recognise such transparency does not alleviate the frustration of those subject to severe restrictions, if this is a feature of an operator’s business model then it is something that they should inform consumers about.
“It is not in our remit to mandate how operators handle their commercial liabilities, but we do have a statutory responsibility to ensure that gambling is conducted in a fair and open manner, to understand potential drivers of illegal gambling, and to ensure that industry practices are not having an adverse impact on the effectiveness of regulation. That is why as an evidence-led regulator we have undertaken this piece of work.”
